Street signs: Fed to drive Nifty, firms defer IPOs in weak market, and more

Monsoon, US Fed to drive Nifty

The Nifty moved in a narrow band and tested 12,000-point level last week, but failed to hold on to its early momentum. Analysts believe that the upside may be capped for the Nifty and the index may fall further if it fails to hold 11,800, with the next crucial support at 11,650.

The market will take its cues from the progress of the US-China trade war, the outcome of the US Federal Reserve policy outcome on June 19, and the progress of monsoon this week.

Ashley Coutinho

 

MFs buy BHEL on strong results

Bharat Heavy Electricals (Bhel) is seeing renewed interest from domestic mutual funds (MFs) as the thermal power player reported a 50 per cent surge in its 2018-19 net profit owing to cost-cutting measures.

According to data collated by Emkay Global, a dozen fund houses added to their exposure to the firm in May. HDFC MF acquired 30 million shares in the company, while Reliance MF and Birla Sun Life MF also added around 2 million each. However, analysts say future prospects of the stock would depend on the pace of order inflow, which had seen sharp slowdown in 2018-19. Year-to-date, the stock is down 6.7 per cent.

Jash Kriplani

 

Firms defer IPOs in weak markets

Market uncertainties loom over at least half a dozen companies whose regulatory approvals for launching initial public offerings (IPOs) expire before July 2019. While some like realty major Lodha Developers plan to re-file their offer document, others are now exploring private equity funding. Bankers said companies don’t see current market environment as conducive for raising funds through a public issue. “The market rally is still quite narrow. Broader markets remain weak. Meanwhile, there is uncertainty due to US-China trade tensions, ongoing friction between Iran and US. Only high-quality companies will be able to float a public issue in this environment,” said a merchant banker. 

Sundar Sethuraman